PRC-1 · Chapter 7 · Question 40 of 100
An entity uses the AVCO method. Opening stock: 100 units @ Rs. 10. Purchase: 100 units @ Rs. 12. Sale: 50 units. What is the AVCO per unit at the time of the sale?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 11
Explanation
Total value = (100 x 10) + (100 x 12) = 1,000 + 1,200 = 2,200. Total units = 200. Average cost per unit = 2,200 / 200 = Rs. 11.
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